Last time we spoke to Brian Maas, President of the California New Car Dealers Association (CNCDA), he expressed his concerns about Volvo’s plans to move its EV sales online. On today’s show, we take a closer look at current dealer sentiment in California and what the CNCDA has on its agenda for the remainder of 2021.
There are many companies in the auto retail space that are interested in pursuing a direct sales model. In California, as long as a retailer does not have franchised dealers, they can sell direct to consumers online. Tesla, for example, has been operating in California for many years and its business structure allows the EV maker to bypass some franchised dealers laws in the state. The CNCDA’s concern is to make sure that everyone operating as a dealer has a level playing field, and that state law compliance is consistent across the board.
There are also concerns regarding the spread of COVID variants especially in southern California, however dealerships remain open. There are indoor masking requirements in several jurisdictions like L.A. County and Sacramento County. As long as both dealers and consumers comply with these mandates, Maas is confident that they can continue to do business.
Like a majority of car dealers across the country, California dealers are having trouble sourcing new and used vehicle inventory.
Maas adds, “There’s just not enough product to meet the demand consumers have. Of course, that affects prices, features, and other things. We’re hoping the chip shortage resolves itself in the next several months and we get a little more close to an equilibrium.”
In fact, CNCDA economists predict that 100,000 to 150,000 fewer vehicles will be sold this year in California as a direct result of the chip shortage.
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